18th Package of European Union Sanctions Against Russia: What’s New?

24.07.2025

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On July 18, 2025, the Council of the European Union (EU) adopted the 18th package of restrictive measures against the Russian Federation. The EU expanded the list of blocking sanctions, introduced new trade and financial restrictions, and implemented measures aimed at protecting EU member states from the recognition and enforcement of judicial and arbitral decisions in investment disputes.

Even before the sanctions were adopted, some experts referred to the new package as one of the "toughest" since the EU's sanctions policy against Russia began in 2022. In this article, REVERA's lawyers analyzed whether the new package truly represents a significant tightening of the sanctions regime and its key features.

Energy Sector Restrictions

The EU revised the price cap on Russian oil under the "price ceiling" mechanism: starting September 3, 2025, the price will be lowered from USD 60 to USD 47.6 per barrel, with a review in six months. This new cap will come into force on September 3, 2025, with a 90-day transition period for existing contracts. A complete ban was also introduced on all transactions related to the Nord Stream 1 and Nord Stream 2 pipelines. Although gas deliveries through these pipelines have ceased, the new ban prevents any attempts to resume them, including maintenance, operation, or gas purchases via them.

New restrictions ban access to EU ports for an additional 105 vessels associated with Russia's "shadow fleet" and prohibit maritime and other related services to these vessels. The total number of such vessels now subject to the ban stands at 444.

The EU also prohibited the import of petroleum products made from Russian oil, even if refined in third countries—except for Canada, Norway, Switzerland, the UK, and the USA. A transition period is in place, with the ban taking effect on January 21, 2026.

Banking Sector

The EU imposed full transaction bans on 22 additional Russian banks, effective from August 9, 2025. A transaction ban was also introduced for the Russian Direct Investment Fund (RDIF) and its affiliated entities, including subsidiaries and investment service recipients—effective July 20, 2025.

Furthermore, the new sanctions package bans the export to Russia of banking and financial system software, including programs for online and mobile banking, loan management, ATM and POS-terminal integration, regulatory reporting, and investment banking.

Trade Restrictions

EU member states were granted additional powers to suspend and investigate exports of high-tech goods to third countries (excluding Russia and Belarus) if credible risks or sufficient grounds exist to believe such goods may be re-exported to Russia or Belarus. Exporters in such cases will be notified that authorization is required.

This mechanism is not an outright ban, as it does not override existing prohibitions on indirect exports. Even without licensing requirements from authorities, exporters may still be held liable if the goods eventually reach Russia or Belarus.

Trade in military goods on the EU Common Military List is now subject to both import and export bans, extending restrictions previously applied only to exports. This also now fully applies to Belarus.

The existing ban on transit through Russian territory has been expanded to include economically significant goods used in construction and transport, such as specific hand and machine tools, additive manufacturing equipment (3D printers), milling machines, and more.

Expansion of Blocking Sanctions

The EU Council expanded the list of blocking sanctions (Annex I of Regulation No. 269) to include 14 individuals and 41 legal entities. These additions result in asset freezes and a full prohibition on conducting business within the EU jurisdiction.

Enforcement of Judicial and Arbitral Decisions in Investment Disputes

New provisions prohibit the recognition or enforcement of judicial rulings, arbitral awards, or legal assistance requests, penalties, or sanctions related to ISDS (Investor-State Dispute Settlement) proceedings initiated outside the EU against an EU member state, when such disputes concern EU sanctions against Russia (Regulations 269/2014 and 833/2014), and if initiated by:

• persons listed under Regulations 833/2014 or 765/2006, or entities from third countries owned over 50% by them;

• any Russian or Belarusian individuals or entities;

• any persons acting on their behalf or through them;

• and persons who own or control any of the above.

Additionally, the EU and its member states now have the right to claim damages within the EU from such disputes. If the EU court lacks jurisdiction, a member state’s court may consider such claims, provided there is sufficient connection to the member state.

REVERA Commentary

Undoubtedly, the new EU sanctions further narrow the space for business operations and limit access to foreign markets, technologies, and infrastructure. A key innovation in this package is the direct ban on recognizing and enforcing judicial and arbitral decisions related to sanctions, significantly hindering Russian companies and investors from defending their interests in foreign courts and arbitral tribunals.

However, this measure is not entirely new: as early as the 15th sanctions package, the EU banned recognition and enforcement of judgments based on Article 248 FGR of the Russian Federation—known as the "Lugovoy Law"—which allowed Russian courts to prohibit residents from participating in foreign proceedings and claim damages for violations of that ban. Russian courts actively applied this law, even issuing rulings to recover funds from EU residents involved in such foreign disputes.

That said, the new EU ban does not apply to classic commercial disputes unconnected to EU member states or sanctions restrictions.

Author: Aleksei Fedorovich